Who would have imagined that Canada, once the most important trade partner and strategic ally of the US would be virtually excluded from the review USMCA negotiations? The current trade war between the two countries has damaged a historic alliance and it provides lessons for other countries interested in having negotiations with the Trump administration, increasingly focused on its own interests.
Why did this happen? Both Donald Trump and Canada’s prime minister Mark Carney need to respond to their respective constituencies at home. Midterm elections next November in the US may close the distance between Democrats and Republicans, by taking advantage of the declining approval rates of Trump. According to a recent poll conducted a few days ago, the US President's approval rating has fallen to a low of 33 percent -the lowest of his presidency-, with 64 percent disapproving. The main drivers of this decline include public anxiety over the ongoing conflict with Iran and expectations that it will drag on for a long time heavily weigh on his numbers. Roughly 74 percent of Americans in recent polling feel the conflict has not been worth the financial burden or casualties. High gas prices (averaging around 4 US dollars a gallon) and frustration over inflation have driven his net approval on the economy and prices down to the bottom.
What about Mark Carney? Well, as of August 17, Carney's personal approval rating rose to 60 percent, with the Liberal Party holding an 11-point lead over the Conservatives (43 percent). Support surged past 75 percent on specific nationalist stances, such as walking away from contentious US trade talks. It seems information on terms and conditions posed by Trump leaked to Canadian media led to growing alarm that Carney and his negotiators were conceding too much in exchange for lower tariffs on steel, aluminum and cars. Trump also wants American wine to return to Canadian shelves at stores, since it was banned in 8 out of the 10 Canadian provinces and all territories since early 2025 as a retaliatory measure against American tariffs on Canadian products. Premiers of Manitoba and Nova Scotia have confirmed that Carney asked them to return US alcoholic beverages to the stores to improve the chances of reaching a trade agreement with the US. But there is the feeling that concessions to Trump may only prompt more demands. For this reason, Carney does not have the domestic support to reach an agreement at such a high cost.
Las week Trump had claimed that a three-day extension would be applied to the tariff deadline, as an agreement with Canada was all but signed. On Wednesday, he told reporters that a “very fair deal for both” sides had been ironed out. But then talks fell apart shortly before the deadline on Saturday, when the US imposed 50 percent tariffs on 20 US billion worth of Canadian goods. Carney argued that the US offered too little and asked too much. The Canadian prime minister promised to match US tariffs dollar by dollar. This is war.
In the meantime, Mexico and the US have held multiple bilateral rounds to review the USMCA. Even US officials have praised Mexico's pragmatic approach and lack of direct retaliatory tariffs contrary to Canada’s. Mexican Economy Minister Marcelo Ebrard and other officials have stressed that Mexico prefers a united, trilateral approach. Although Mexico wants Canada at the table to maintain integrated North American supply chains, Mexico continues its own separate and constructive discussions with US trade representatives and so, it seems the USMCA as it is known until now is doomed.
What are the consequences of the Canada-US trade war for Mexico? Of course, the spillover effect may hurt North American industries—especially automotive, electronics, and heavy manufacturing— since they rely on parts crossing borders multiple times. Tariffs and border chaos break these production lines. Mexican factories that source components from or send finished goods through the US and Canada will face rising operational expenses and logistics bottlenecks.
Because the US 50 percent tariffs on Canada override previous protections guaranteed under the trilateral trade deal, the long-term reliability of the USMCA is deeply called into question. Donald Trump has said several times that he does not want to renew the trade deal and suggested instead a bilateral approach with Mexico on the one side and Canada on the other. More important is Washington's willingness to abruptly collapse talks and levy massive penalties on a primary partner like Canada signals a volatile trade environment, putting pressure on Mexico's own ongoing and future commercial negotiations with the US. Mexico already faces pressure on issues such as corruption and drug lords’ connections with Mexican politicians -and it should not be forgotten that fighting corruption is a component of the USMCA.
Tensions between the US and Canada raises consumer prices and slows down economic growth across the continent, which can indirectly dampen demand for Mexican exports. Heightened regional instability may cause foreign and domestic companies to pause large-scale manufacturing investments in Mexico until trade rules normalize.
Mexico and Canada are already very distant from each other due to investment concerns, the role of mining companies in environmental degradation in Mexico, the unsolved visas restrictions to tourists and a large etcetera. This is also favored by Donald Trump himself who, as explained, does not want a trilateral but rather a bilateral negotiations approach which gives him a remarkable advantage over its two vulnerable neighbors.
Speaking about the approval rates of Mexico’s Claudia Shainbaum major tracking polls place her approval between 68 and 70 percent, reflecting a slight decline from peaks near 77–78 percent earlier in the year, but remaining robust overall. According to a Pew Research Center poll, high marks continue for her handling of education (65 percent), the broader economy (61 percent), and general relations with the United States (55 percent). Yet disapproval remains higher regarding her administration's efforts to curb organized crime, drug trafficking, and corruption, which pollsters note are persistent vulnerabilities for her government.
Interesting to note that she has not met with Donald Trump but twice and in the two cases due to the events surrounding the FIFA 2026 World Cup. Instead, Carney and Trump have met more times, although some meetings have been short and always tense. Trump disliked the speech made by Carney at Davos at the beginning of 2026 where he called for a more prominent role for middle powers to united against economic coercion. As a retaliatory measure Trump withdrew the invitation to Canada to join the Board of Peace. And Carney has deployed a foreign policy that has looked for diversification both with Europe and China and this has angered the Republican veteran.
Mexico has deployed a more discrete foreign policy and even though it concluded the very complex Global Agreement with the European Union it has also made clear the US remains its most important and strategic partner. In addition to that Mexico has imposed trade restrictions on Chinese and Korean products by arguing it does not have trade agreements with them -but it is clear these measures have to do with pressures coming from Washington.
At the end Trump has been rude with its two neighbors but the animosity against Canada has crossed unimaginable borders: when trade negotiations collapsed last week, the US president said, on a South Park fashion, that Canada is behaving like a country when it is not, suggesting one more time that to avoid tariffs it may want to become the 51st state.
Mexico has decided not to intervene in the Canada-US trade war, but to save itself. Yet, the consequences of the trade confrontation between Ottawa and Washington are far reaching for Mexico and the world. It seems that, for as long as Donald Trump is the US president, trade wars and retaliation will prevail. This is a warning for the world.
Editor’s Note: The above guest column was penned by María Cristina Rosas, a professor and researcher in the faculty of political and social sciences at the National Autonomous University of Mexico in Mexico City. The column appears in The Rio Grande Guardian International News Service with the permission of the author. Rosas can be reached via email at: mcrosas@prodigy.net.mx
